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Minimal taxable income
originally posted: 11/22/2006
reposted: 2/18/2011 This post has not
been recently reviewed or revised by the author and may be out of date.
If you notice an error or are in doubt, please send a new question by
email or ask for an update. Email asktony@tonynovak.com.
Q: I am not working at all this
year and do not expect to. In fact my only income is will be $3,600.00
from a CD. I know that the poverty level is $8,200.00 but will I have
to still pay taxes on the interest from he CD? I know CD's are taxable
income.
A: If this is your only income
and you file taxes on your own (and not as someone else's dependent),
then you will not owe any federal income tax. This is because even
though interest is taxable income, you fall below the minimum total
income for the year after taking the allowable "personal exemption" and
"standard deduction" on the tax return. You do, however, have to file
the tax return showing that you owe no tax.
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